Live Events: Government-backed Insurance

Kevin Brennan Excerpts

Tuesday 23rd March 2021 Westminster Hall

[Kevin Brennan (Cardiff West) (Lab)]

It is a pleasure to serve under your chairmanship, Mr Rosindell, and it is also a pleasure to be part of this cross-party supergroup this morning, which has got together to work across party lines and to argue for proper insurance indemnity for events this year from the Government.

I thank the Minister for her attendance, although, as the hon. Member for Winchester (Steve Brine)—who, like me, is on the Digital, Culture, Media and Sport Committee—has just said, we would really like to hear from the Treasury, because we would like to know what it has made of all the representations that have been made to it by the industries that we are talking about today. For fronting up for the Government time and again, the Minister deserves some kind of award, but we need to know the answers, and one wonders whether they are currently locked away in a vault somewhere across the road in the Treasury. We want to know what the Treasury really thinks.

As the hon. Member for Winchester did, I will focus today on festivals and live music events, but I will also say a little bit about theatre. I will not go through the whole set of statistics, as the hon. Members for Caithness, Sutherland and Easter Ross (Jamie Stone) and for Winchester have already done. Suffice it to say that one statistic for Cardiff is that across the river from my constituency, in the Principality Stadium, Ed Sheeran played four nights in a row in June 2018 to 60,000 people a night, which is nearly a quarter of a million people over the course of just a few nights. I do not need to spell out to hon. Members and to people watching this debate the economic impact of such events, and their importance to the economy of Cardiff and to the wider economy of south Wales.

In talking about festivals this morning, we want the Government to provide some clarity. If it is the case that it is not going to be possible for them to underwrite events and if it is going to be the case that they do not think that they will stick to their irreversible timetable and will probably have to impose further restrictions in the future, they should say so, because at the moment the sector is being led along on a string effectively and is unable to progress appropriately.

I have heard it said that the Government think that because festivals and live music events are selling tickets they do not need insurance, but of course normally—in a normal year—that ticket revenue would be used to do the build and provide the infrastructure to put on things such as festivals. However, this year is not a normal year, because festivals cannot get any cancellation insurance; they cannot get insurance against not being able to proceed, which would normally be available in the market, as the hon. Member for Winchester said. As a result, that money would have to be returned to ticket purchasers if the event was unable to go ahead and there would be a huge impact on those trying to put on festivals and also further down the supply chain.

That is why the hon. Gentleman—who, as I have said, is on the DCMS Committee, like me—was quite right to draw the attention of that Committee and of the Minister to the possibility of money being taken from people that will never be returned to them, and potentially fraudulent activity taking place around the festival scene this year without the kind of certainty that insurance provides. So we need either insurance to be underwritten for the sector to be able to restart or a clear indication that festivals will not be able to take place and financial support to allow the sector to survive into 2022.

Other countries are doing things about this situation.

[Jamie Stone]

The hon. Gentleman is making a splendid contribution to the debate, which I really appreciate. Does he agree that the longer we delay in getting these events up and running, the more danger there is of people losing momentum and even deskilling, in terms of performance and generating public enthusiasm?

[Kevin Brennan]

The hon. Gentleman is absolutely right. I have praised the investment in the culture recovery fund, which the Minister will mention in her remarks at the end of the debate—she has to do that; it is an important riff for her as the Minister. There are criticisms, however. In the 1980s, we had the concept of the neutron bomb, which was developed so that it would kill the enemy but not destroy the buildings all around. In a way, the culture recovery fund is a wonderful thing, but if it just saves the buildings and some infrastructure, but does not protect the people in the sector and the skills that the hon. Gentleman mentioned, that will be an additional cost. He is right to make that point.

I was going to mention what is happening in other countries. The Danish Government have announced an event cancellation fund of €67.2 million. The Dutch Government have just announced an insurance fund of €385 million. Finland’s Ministry of Economic Affairs and Employment is working on a Government-backed insurance scheme for summer events, to be finalised by the end of the month. The Estonian Government have a scheme. The Germans have a similar fund, of €2.5 billion, to cover promoter risk. I could also mention schemes proposed by the Austrian, Belgian and Norwegian Governments. Such a scheme is not without precedent, because there is a precedent in the creative industries in this country, in the film and television sector. All that many people in the industry are asking for is a similar scheme. It is vital for live music events and festivals that action is taken.

I want to speak briefly about theatre. The theatre sector, and UK Theatre, have been lobbying Government hard for months. Many people involved in theatre production are also involved in film and television production, and they do not understand why the Treasury could provide an insurance indemnity scheme for the film and television industry, but could not provide an identical scheme for the theatre sector, as UK Theatre is asking for. Without a return to normal for theatre production, there will be a huge negative impact on the total economy, including loss of tax revenues and economic activity. That will be felt particularly badly in city centres and some towns.

The insurance market is not offering a scheme of this kind, and it is clear that it will not offer one for the foreseeable future—into 2022 at the very least. The risk exposure figures have been provided to Her Majesty’s Government by, for example, UK Theatre and the new umbrella body for the live sector. The Treasury has not publicly said what is wrong with those figures, and that is what we need to know—if it does not agree with what the sector is saying, it should say so.

We need to hear from the Minister not only about the culture recovery fund, although we understand how important it has been, but about the discussions between her and the Secretary of State and the Treasury. What have the discussions been like, and what is the Treasury saying? If it will not be possible to provide an underwriting insurance scheme, the Government should come clean with the creative industries, so that they can plan accordingly, and Ministers should offer support to help them through to the next stage of this dreadful pandemic.

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[The Minister for Digital and Culture (Caroline Dinenage)]

It is such a pleasure to serve under your stewardship, Mr Rosindell, and to respond on behalf of the Government to this important debate. I start by heaping praise on to the hon. Member for Caithness, Sutherland and Easter Ross (Jamie Stone) for securing this vital debate and enabling this discussion on a subject that is so important to such a vast number of our sectors. It is quite poignant that this debate comes a year since the lockdown started. What a horrible year it has been. So many speakers highlighted just what a huge loss it has been to so many of us to have live events missing from our lives.

The hon. Gentleman spoke with great passion about events in his part of Scotland, including the highland games, of course, which as well as being wonderful for local morale, spirit and wellbeing are a huge contributor to the local economy and a global phenomenon that really puts Scotland on the map; they are well known all around the world. I completely understand his desire to see them back up and running again as soon as possible. In fact, the strength of sentiment shown across the room demonstrates how desperately important the digital, culture, media and sport sectors are not just to our economy and our heritage, but to our sense of wellbeing as a nation. We are desperate to be able to return to live events.

As if to taunt me, we have had representatives from some of the areas where I was due to have seen live events last year. I was due to go to Kew the Music to see the Gipsy Kings. I was due to have been at Boomtown and at the Isle of Wight festival. All of that was taken away so I can completely understand people’s frustration from a personal perspective as well as a professional one. The hon. Member for Richmond Park (Sarah Olney) spoke about the pent-up demand and she hit the nail on the head. We are all desperate to be able to return to live events from festivals, gigs and theatre to business and sporting events, and we want to do that as soon as it is safe to do so.

Many hon. Members have highlighted the vast contribution that DCMS sectors make to the UK’s international standing, to all our lives and specifically to the economy—in 2019, £116 billion from the creative industries, £17 billion from sport, £151 billion from digital, and £75 billion from tourism. These sectors together support a total of around 6.9 million jobs. We have an economic imperative as well as a cultural one to stand by those industries.

[Kevin Brennan]

We have our differences but I am grateful to have this conversation. I know the Minister’s personal support for the sector and she has rightly emphasised its economic value. Have the Government looked at the schemes in other European countries that I highlighted in my remarks, which are being put in place to underwrite the possibility of having events go ahead? What is her assessment of what other countries are doing and whether the UK could mirror that?

[Caroline Dinenage]

I am really pleased that the hon. Gentleman raised this because, of course, we are looking at all the schemes. I was coming on to say that the hon. Member for Richmond Park talked about that as a straightforward solution and the hon. Member for Perth and North Perthshire (Pete Wishart) said how we have nothing to lose, but the person who hit the nail on the head was my hon. Friend the Member for Winchester (Steve Brine), who said this is a leap of faith for the Government.

There have been different schemes announced around the world, but most recently the German scheme has now been stalled. The €2.5 billion that the Germans promised has been stalled in light of the public health situation as they have announced a third lockdown in Germany over Easter. That is the worst possible situation—to announce a package of support and then withdraw it. That is the situation that we want to avoid, which is why we are looking at this so carefully.

I understand more than anything the urgency of the situation when it comes to a decision on indemnity, and the hon. Member for Cardiff West (Kevin Brennan) said it is key that this decision is made soon. Like so many of the tough decisions that have been made over the last year, it is a really difficult one, and ultimately it is a decision for the Treasury because it is a financial one, as he pointed out. In DCMS, our job is to work very closely with the sector, as we have been doing right the way through this crisis, to figure out exactly what is needed, to gather all the evidence together and to present that to our colleagues in the Treasury.

As many colleagues have said today, the circumstances of the pandemic have left so many of the sectors that DCMS is proud to represent without the certainty they need to confidently reopen. Our engagement started from day one. Almost on a weekly basis, I am talking to one group or another from across our sectors. We have working groups and those that are bringing together guidance. I have met individually with representatives from various sectors. I met with my hon. Friend the Member for Isle of Wight (Bob Seely) along with all the festivals on the Island. I met with all the festivals in Edinburgh, for example. We are continually engaging with stakeholders throughout this period to understand what they need, what the barriers are to reopening, and what the challenges are, and that will, of course, include indemnity cover.

--- Later in debate ---

[Caroline Dinenage]

I understand exactly what my hon. Friend is saying. Another Member—I cannot remember who it was—said that this is, by definition, quite a precarious industry anyway. My eldest son was due to go to the Boardmasters festival down in Newquay the year before, which was tragically cancelled because of the weather. The festival organisers have had to put up with two years of cancellations already before 2021, so Members can see what a huge pressure has been put on them.

However, hon. Members will recognise that the bar for considering Government intervention is set extremely high, as of course it has to be, especially in light of the considerable extension to so many financial packages that have already been helping our sectors—the furlough scheme, the business rate relief, the VAT cuts and local business support. The key thing that will give us much more certainty as we move forward is our world-class vaccination roll-out, along with all the steps we have been taking to beat the virus. This, along with reopening when we are confident that it is safe to do so, will reduce the chance of cancellation and interruptions due to covid-19, creating a much more predictable and secure opening context for all sorts of events to take place. Hopefully that will de-risk the sector as well.

In that context, we are continuing to engage with organisations to work through all the barriers to staging events, and indemnity insurance is of course one of those. It is part of our wider drive to reopen our crucial sectors as quickly as it is safe to do so. We are also working with other Departments. The Opposition spokeswoman, the hon. Member for Wirral South (Alison McGovern), asked me about that. We do meet regularly with other Departments. I met with representatives from a number of Departments last week, and we worked very closely with them to talk about the public health context and ensure that we are in a good position. In an ideal world, the insurance sector itself would step up to the plate and support this vital part of our economy, but in the absence of that, any decision on a sponsor package rests with the Treasury.

The Government recognise the challenges that have been faced by organisations and individuals alike and have ensured that support is available. The hon. Member for Cardiff West trailed this, but I will now talk about some of the specific things that have taken place across the wider economy. A number of Members have spoken about freelancers, and we know that so many of our live events depend upon an army of really talented freelancers, who do a whole range of really skilled jobs. Our sectors rely on freelance work more than any other, and I am keenly aware of the financial needs that many have found themselves in. That is why I was really pleased that in his Budget speech the Chancellor extended the self-employed income support scheme, which means an additional 600,000 people can access support on top of those who have already received it. In addition, Arts Council England has so far awarded £51 million to individuals needing support. Those things are important as well, as we try to work our way back.

The Chancellor also announced that the 100% business rates holiday for retail, hospitality and leisure in England has been extended by an additional three months. He has also extended the 5% VAT reduction until 30 September, before then tapering it for the rest of the financial year. It is worth saying that the VAT cut alone is forecast by the Office for Budget Responsibility to be worth around £4.7 billion for hospitality and tourism and visitor attractions. A new recovery loan scheme will also be launched to replace the existing Government guarantee schemes that close at the end of March, which have supported £73 billion of lending to date. This will help businesses of all sizes, including in our vital DCMS sectors and numerous live events, to take the next stage of recovery.

A total of £700 million of extra funding to support our world-leading arts, culture and sporting institutions was announced in the Budget, all serving to protect what makes the UK a world-leading destination. The levelling-up fund—45 new town deals and city growth deals in Scotland and Wales—shows how the Government are investing right across our Union.

[Kevin Brennan]

The Minister is being generous in giving way; I am grateful. I understand that she has to outline the other things that the Government are doing—in another debate, many of us would argue that there are still a lot of gaps and that a lot of people are missing out—but the subject of today’s debate is Government-backed insurance for live events. Just to take her back to that for a moment, I listened to what she said earlier. Some in the creative industries feel that the Government might be delaying an announcement on this because they are going to cherry-pick which sectors they will be prepared to provide some insurance indemnity for eventually, and that the major victim of that will be live music and the festivals sector. That will just be filed in the drawer at the Treasury marked “Too difficult.” Are they wrong in thinking that?

[Caroline Dinenage]

The hon. Gentleman is slightly over-complicating this. I do not think that is the case at all. The film and TV restart scheme was something that many thought would be too difficult, but we were able to do that at pace last year, and by the last quarter of last year we were seeing more film and TV production than virtually any other quarter, so we know that these things can be done despite obstacles.

Also, the hon. Member for Cardiff West must be careful not to brush away the £65 billion-worth of measures announced in the Budget for this year and next, which will support the economy through the pandemic. Those things are literally saving livelihoods every single day, and of course that builds on the existing support already committed, which totalled £353 billion across the economy. The support that has been put in place is world leading and has been vital to the continued survival and recovery of our DCMS sectors. I meet parts of our sectors every week, and they have seen measures such as the furlough scheme and the business support measures as a lifeline allowing their survival.

The hon. Member for Cardiff West talks about bricks and mortar, but it is also about individuals, and there has been a lot of direct support for individuals. At the end of the day, however, the one thing that so many of our great performers, artists and professionals in these sectors want to do is get back to work as quickly as possible. They need to have venues in which to be able to do that. That is why it is important that that support is across the board and why the culture recovery fund has been so successful, with an additional £300 million dedicated to that in the Budget. That is an extension of the original £1.57 billion fund, which is unprecedented. That will safeguard our cultural and heritage organisations, while it also helps support supply chain organisations, which rely so much on them, with supply chain organisations able to apply for both of the rounds so far.

I want to talk a little about the road map and the reopening. The Prime Minister announced the scientific events research programme and a number of hon. Members have asked me about that. It is an integral part of the road map, which will explore how larger events across the cultural and entertainment sectors can reopen safely. Over the spring this will include a series of pilots that will use enhanced testing approaches and other measures to run events with larger crowd sizes and reduced social distancing and evaluate the outcomes. The road map sets out the planned caps on capacity for events when they reopen at stage 3, but the findings will come from all different sectors and settings to determine a consistent approach to lifting the restrictions when the time is right.

I am sure I speak for all of us when I say that I cannot wait to have our theatre, sport, festivals, live music venues and events open as soon as possible. As the Chancellor said in his Budget speech, the Government stand ready to do whatever it takes to help our country and our economy recover from the disruption of the coronavirus pandemic.